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Note 13 - Stock Incentive Plans
 12 Months Ended
Dec. 29, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
(13)
Stock Incentive Plans

On April 3, 2000, the Company adopted the 2000 Stock Option Plan (the Plan).  In 2003, the Company adopted the Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan, in 2004, the Company adopted the Build-A-Bear Workshop, Inc. 2004 Stock

Incentive Plan and in 2009, the Company amended and restated the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (collectively, the Plans).

Under the Plans, as amended, from January 3, 2009, up to 3,230,000 shares of common stock were reserved and may be granted to employees and nonemployees of the Company.  The Plan allows for the grant of incentive stock options, nonqualified stock options, stock appreciation rights (SAR) and restricted stock.  Options granted under the Plan expire no later than 10 years from the date of the grant.  The exercise price of each incentive stock option shall not be less than the fair value of the stock subject to the option on the date the option is granted. The vesting provision of individual options is at the discretion of the compensation committee of the board of directors and generally ranges from one to four years.  Each share of stock awarded pursuant to an option or subject to the exercised portion of a SAR reduces the number of shares available by one share.  Each share of stock awarded pursuant to any other stock-based awards, including restricted stock grants, reduces the number of shares available by 1.27 shares.

 
(a)
Stock Options

The following table is a summary of the balance and activity for the Plans related to stock options for the periods presented:

   
Number of
Shares
   
Weighted
Average
Exercise Price
   
Weighted
Average
Remaining
Contractual Term
   
Aggregate
Intrinsic
Value
(in thousands)
 
Outstanding, January 2, 2010
    805,347      $ 9.51              
Granted
    391,228        6.63              
Exercised
    28,484        0.87              
Forfeited
    42,868        9.32              
Outstanding, January 1, 2011
    1,125,223        8.73              
Granted
    305,727        6.22              
Exercised
    55,501        5.13              
Forfeited
    164,633        7.04              
Outstanding, December 31, 2011
    1,210,816        8.49              
Granted
    228        8.32              
Exercised
    —       -              
Forfeited
    55,805        7.79              
Outstanding, December 29, 2012
    1,155,239      $ 8.53       6.0     $ -  
                                 
Options Exercisable As Of:
                               
December 29, 2012
    704,937      $ 10.06       5.1     $ -  
                                 

The expense recorded related to options granted during fiscal 2012 was immaterial.  The expense recorded related to options granted during fiscal 2011 was determined using the Black-Scholes option pricing model and the provisions of Staff Accounting Bulletin (SAB) 107 and 110, which allow the use of a simplified method to estimate the expected term of “plain vanilla” options.  The assumptions used in the option pricing model during fiscal 2011 were: (a) dividend yield of 0%; (b) volatility of 65%; (c) risk-free interest rates ranging from 1.2% to 2.5%; and (d) an expected life of 6.25 years.  The grant date fair value of options granted in 2011 was approximately $1.2 million.

The assumptions used in the option pricing model during fiscal 2010 were: (a) dividend yield of 0%; (b) volatility of 65%; (c) risk-free interest rates ranging from 2.1% to 3.4%; and (d) an expected life of 6.25 years.  The assumptions used in the option pricing model during fiscal 2009 were: (a) dividend yield of 0%; (b) volatility of 65%; (c) risk-free interest rates ranging from 2.3% to 3.1%; and (d) an expected life of 6.25 years.

The total intrinsic value of options exercised in fiscal 2011 and fiscal 2010 was approximately $0.1 and $0.2 million.  No options were exercised in 2012.  The Company generally issues new shares to satisfy option exercises.

Shares available for future option, non-vested stock and restricted stock grants were 608,864 and 1,104,894 at the end of 2012 and 2011, respectively.

 
(b)
Restricted Stock

The following table is a summary of the balance and activity for the Plans related to unvested restricted stock granted as compensation to employees and directors for the periods presented:

         
Weighted
 
         
Average
 
   
Number of
   
Grant Date
 
   
Shares
   
Fair Value
 
Outstanding, January 2, 2010
    1,450,308     $ 7.23  
Granted
    486,302       6.56  
Vested
    376,142       10.05  
Forfeited
    92,095       6.73  
Outstanding, January 1, 2011
    1,468,373       6.32  
Granted
    532,791       6.46  
Vested
    394,766       8.52  
Forfeited
    168,267       5.68  
Outstanding, December 31, 2011
    1,438,131       5.85  
Granted
    366,270       4.97  
Vested
    874,852       5.53  
Forfeited
    69,224       6.03  
Outstanding, December 29, 2012
    860,325     $ 5.78  

The vesting date fair value of shares that vested in 2012, 2011 and 2010 was $4.6 million, $2.5 million and $2.6 million, respectively.

During 2012, 278,308 shares of  restricted stock were granted to employees of the Company.  The shares vest over a period of four years from the grant date at grant date fair values ranging from $3.59 to $8.32.  Various members of the Company’s board of directors were granted an additional 87,962 shares in the aggregate of restricted stock as compensation for services.  The shares were issued subject to a restriction of continued service on the board of directors and all restrictions lapse six months from the grant date or upon a director’s retirement upon the completion of his or her term, if earlier.

During 2011, 455,640 shares of restricted stock were granted to employees of the Company.  The shares vest over a period of four years from the grant date at grant date fair values ranging from $5.31 to $7.94.  Various members of the Company’s board of directors were granted an additional 77,151 shares in the aggregate of restricted stock as compensation for services.  The shares were issued subject to a restriction of continued service on the board of directors and all restrictions lapse one year from the grant date or upon a director’s retirement upon the completion of his or her term, if earlier.

During 2010, 402,656 shares of restricted stock were granted to employees of the Company.  The shares vest over a period of four years from the grant date at grant date fair values ranging from $5.94 to $9.64.  Various members of the Company’s board of directors were granted an additional 83,646 shares in the aggregate of restricted stock as compensation for services.  The shares were issued subject to a restriction of continued service on the board of directors and all restrictions lapse one year from the grant date or upon a director’s retirement upon the completion of his or her term, if earlier.

The aggregate unearned compensation expense related to options and restricted stock was $4.3 million as of December 29, 2012.  Based on the vesting provisions of the underlying equity instruments, future compensation expense related to previously issued options and restricted stock at December 29, 2012 will be as follows (in thousands):

2013
  $ 901  
2014
    1,992  
2015
    1,117  
2016
    328  
    $ 4,338  

The outstanding non-vested restricted stock is included in the number of outstanding shares on the face of the consolidated balance sheets, but is treated as outstanding stock options for accounting purposes.  The shares of non-vested restricted stock, accounted for as options, are included in the calculation of diluted earnings per share using the two-class method, with the proceeds equal to the sum of unrecognized compensation cost.